Logitech Jumps to Three-Year High on Sales Outlook: Zurich Mover

By Corinne Gretler -
Jan 23, 2014

Logitech International SA (LOGN) rose to
the highest price in almost three years as the world’s biggest
maker of computer mice raised its full-year sales and profit
forecast after third-quarter results beat analyst estimates.

The shares surged 12.7 percent to 13.75 Swiss francs at
11:51 a.m., the biggest rally since April 2012, giving the
company a market value of 2.38 billion francs. The stock earlier
advanced as much as 15 percent.

Logitech boosted its outlook for sales to just under $2.1
billion, compared with a previous prediction of $2 billion. The
company also raised its forecast for (non-GAAP) operating income
to $120 million to $125 million, up from an earlier forecast of
$100 million.

“Logitech’s operating result was clearly above market
expectations,” Andreas Mueller, an analyst at Zuercher
Kantonalbank AG in Zurich with a buy rating on the stock, wrote
in a note to clients today. “The lower operating costs thanks
to its cost-cutting program and the surprisingly low sales was
encouraging and once again underlined the turnaround. The
consensus estimates for the fiscal year 2014 are thus clearly
too low.”

The improved outlook comes as the company reported third-quarter net income of $48.5 million, beating a $31 million
analyst projection, while sales amounted to $628 million. That
also exceeded an average analyst estimate of $594.7 million,
according to figures compiled by Bloomberg.

“We’re encouraged by the robust sales in our growth
categories, as well as the success of our ongoing initiatives to
improve profitability, which includes the earlier-than-expected
return to profitability of LifeSize,” said Chief Executive
Officer Bracken Darrell, referring to LifeSize Communications
Inc., the videoconferencing unit the company bought in 2009.

“We still have more work ahead, but our turnaround is on
track as we continue to build a faster and more profitable
Logitech,” Darrell said in the company's e-mailed release.